Correlation Between Liberty All and Cohen Steers

Can any of the company-specific risk be diversified away by investing in both Liberty All and Cohen Steers at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Liberty All and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Liberty All Star and Cohen Steers Reit, you can compare the effects of market volatilities on Liberty All and Cohen Steers and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Liberty All with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty All and Cohen Steers.

Diversification Opportunities for Liberty All and Cohen Steers

-0.3

Correlation Coefficient

Liberty All  Cohen Steers

Very good diversification

The 3 months correlation between Liberty and Cohen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Liberty All Star and Cohen Steers Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Reit and Liberty All is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Liberty All Star are associated (or correlated) with Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Reit has no effect on the direction of Liberty All i.e., Liberty All and Cohen Steers go up and down completely randomly.

Pair Corralation between Liberty All and Cohen Steers

Considering the 90-day investment horizon Liberty All is expected to generate 1.08 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Liberty All Star is 1.3 times less risky than Cohen Steers. It trades about 0.1 of its potential returns per unit of risk. Cohen Steers Reit is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,658  in Cohen Steers Reit on September 1, 2024 and sell it today you would earn a total of  673.00  from holding Cohen Steers Reit or generate 40.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Liberty All Star  vs.  Cohen Steers Reit

Liberty All Star

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty All Star are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Liberty All may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Cohen Steers Reit

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Reit are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, Cohen Steers is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Liberty All and Cohen Steers

The main advantage of trading using opposite Liberty All and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty All position performs unexpectedly, Cohen Steers can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cohen Steers will offset losses from the drop in Cohen Steers' long position.

The idea behind Liberty All Star and Cohen Steers Reit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.